Quarter 1 - financial statement for 2025

Sterling Financial Holdings Company Plc and Subsidiaries Condensed Unaudited Interim Financial Statements for the Period Ended 31 March 2025

Page

Report of the Directors 1

Corporate Governance Report 4

Statement of Corporate Responsibility for the Financial Statements 8

Condensed Statement of Profit or Loss 9

Condensed Statement of Financial Position 10

Condensed Statements of Changes in Equity 11

Condensed Statements of Cash Flows 13

Notes to the Condensed Financial Statements 14

Directors' Report

For the period ended 31 March 2025

The Directors present their first quarter report on the affairs of Sterling Financial Holdings Company Plc ("the Company"), together with the unaudited Group Financial Statements for the quarter ended 31 March, 2025.

Principal activity and business review

The principal activity of Sterling Financial Holdings Company Plc (the Company) is to carry on business as a non-operating financial holding company investing in companies as may be approved by the Board of Directors and in accordance with Central Bank of Nigeria permissible activities. The Company has 3 (three) subsidiaries - Sterling Bank Limited, a commercial bank; Alternative Bank Limited, a non-interest bank; and SterlingFi Wealth Management Ltd, an asset management company.

Legal form

Sterling Financial Holdings Company Plc was incorporated on 13 October 2021 as a private limited liability company and re-registered as a public company on 16 November 2022. The Company's shares were listed on Nigerian Exchange Limited on 6 April 2023. The Central Bank of Nigeria issued the Company its final license on 27 June 2023 and the Company commenced operations on 1 July 2023.

Operating results

Highlights of the Group and Company's operating results for the period are as follows:

Group Company

In millions of Naira March 2025 March 2024 March 2025 March 2024

The following Directors served during the period under review:

Name Designation Interest represented

1. Mr. Adeyemi Adeola Chairman Alfanoma Nigeria Limited Plural Limited

   Reduvita Limited

   Quakers Integrated Services Limited Concept Features Limited

2. Ms. Eniye Ambakederemo Independent Director Non-Executive

3. Mr. Adeshola Adekoya

   Director STB Building Society Limited

   Eltees Properties

   Rebounds Integrated Services Limited

4. Ms. Aisha Bashir Independent Director Non-Executive

5. Mr. Abubakar Suleiman

6. Mr. Ashutosh Kumar

   Director

   Non-Executive

   Director State Bank of India

7. Mr. Yemi Odubiyi Managing Director

8. Mr. Olayinka Oni Executive Director

Going Concern

The Directors assess the Group and the Company's future performance and financial position on an on-going basis and have no reason to believe that the Group will not be a going concern in the period ahead. For this reason, these financial statements are prepared on a going concern basis.

Directors interests in shares

Interest of Directors in the issued share capital of the Company as recorded in the Register of members and/or as notified by them for the purpose of section 301 of the Companies and Allied Matters Act 2020 were as follows:

Number of shares

Director's interests in contracts

For the purpose of Section 303 of the Companies and Allied Matters Act, 2020, none of the current Directors had direct or indirect interest in contracts or proposed contracts with the Group during the year.

Director's Remuneration

The Company ensures that remuneration paid to its Directors comply with the provisions of the codes of corporate governance issued by its regulators.

In compliance with Section 16.8 of the Nigerian Code of Corporate Governance, the Company hereby disclose the remuneration paid to its Directors as follows:

Type of Package Fixed

Description

Timing

Beneficial ownership

The Company is owned by Nigerian citizens, corporate bodies and foreign investors.

Analysis of shareholding

The range analysis of the distribution of the shares of the Company as at 31 March 2025 is as follows:

The following shareholders have shareholdings of 5% and above as at 31 March 2025:

Acquisition of own shares

The Company did not acquire any of its shares during the quarter ended 31 March 2025 (31 December, 2024: Nil).

Property, plant and equipment

Information relating to changes in property, plant and equipment is given in Note 26 to the consolidated and separate financial statements.

Employment and employees

1. Employment of disabled persons

   The Company has a non-discriminatory policy on recruitment. Applications would always be welcomed from suitably qualified disabled persons and are reviewed strictly on qualification. The Company's policy is that the highest qualified and most experienced persons are recruited for appropriate job levels irrespective of an applicant's state of origin, ethnicity, religion or physical condition.

2. Health, safety and welfare of employees

   Health and safety regulations are in force within the Comapny's premises and employees are aware of existing regulations. The Company provides subsidies to all levels of employees for medical expenses, transportation, housing, lunch etc.

3. Employee training and development

   The Company is committed to keeping employees fully informed as much as possible regarding the Company's performance and progress and seeking their opinion where practicable on matters, which particularly affect them as employees.

   Training is carried out at various levels through both in-house and external courses. Incentive schemes designed to encourage the involvement of employees in the Company's performance are implemented whenever appropriate.

4. Events after reporting date

There were no events after the reporting date which could have had a material effect on the state of affairs of the Company as at 31March 2025 or the profit for the period ended on that date which have not been adequately provided for or disclosed.

BY ORDER OF THE BOARD:

Adeyoola Temple

Group Head, Company Secretariat FRC/2015/PRO/NBA/002/00000012648

20 Marina, Lagos, Nigeria. May 28, 2025

Corporate Governance

The Company complies with the relevant provisions of the Nigerian Code of Corporate Governance, the Nigerian Securities & Exchange Commission (SEC) Corporate Governance Guidelines and the Central Bank of Nigeria (CBN) Corporate Governance Guidelines for Financial Holding Companies in Nigeria.

Board Composition and Committee Board of Directors

The Board of Directors (the 'Board') is made up of the Non-Executive Chairman, Non-Executive Directors and Executive Directors who oversee the corporate governance of the Company. The members are as follows:

1. Mr. Yemi Adeola Chairman

2. Mr. Adeshola Adekoya Non- Executive Director

3. Ms. Eniye Ambakederemo Independent Director

4. Ms. Aisha Bashir Independent Director

5. Mr. Abubakar Suleiman Non-Executive Director

6. Mr. Ashutosh Kumar Non-Executive Director

7. Mr. Yemi Odubiyi Managing Director

8. Mr. Olayinka Oni Executive Director

Board Committees

The Board carries out its oversight functions through its various committees each of which has a clearly defined terms of reference and a charter which has been approved by the Central Bank of Nigeria. The Board has three (3) standing committees, namely: Board Audit & Risk Managemnt Committee, Board Finance & Investment Committee, and Board Governance, Nomination & Remuneration Committee. In line with best practice, the Chairman of the Board is not a member of any of the Committees. The composition and responsibilities of the committees are set out below:

Board Finance and Investment Committee

The Committee acts on behalf of the Board on all matters relating to financial management and reports to the Board for approval/ratification.

Terms of reference

• Determine the policies and strategies relating to capital management of the Company, and oversee and monitor the implementation of these policies, strategies and financial objectives with a view to maximizing overall shareholder value;

• Ensure finance and investment decisions are in alignment with corporate objectives and strategy;

• Ensure adequate budget and planning processes exist, and performance is measured against annual budget;

• Recommend dividend and tax policies to the Board for approval;

• Review the adequacy of financial systems, operations and internal controls;

• Approve capital and major operating expenditure and investment limits recommended by management;

• Ensure that reporting on issues related to investment and finance are comprehensive for proper deliberation and decision making;

• Ensure investment strategies, policies and guidelines are in compliance with all applicable regulations;

• Consider and approve proposals for significant acquisitions, mergers, takeovers, divestments of operating companies, equity investment and new strategic alliances by the Company or its subsidiaries subject to the final approval of the Board;

• Formulate guidelines from time to time on cost control and reduction, consistent with maximum efficiency, and make appropriate recommendations to the Board;

• Review and report to the Board on, the Company's financial projections, capital and operating budgets, and actual financial results against

  targets and projections;

• Review and recommend to the Board all new business initiatives, especially those requiring a significant capital outlay above management limit;

• Determine an optimal investment mix consistent with risk profile agreed by the Board; and

• Carry out such other functions relating to finance and investment strategy as the Board may from time to time determine. The members are as follows:

  1. Mr. Adeshola Adekoya Chairman

  2. Mr. Abubakar Suleiman Member

  3. Ms. Aisha Bashir Member

  4. Mr. Yemi Odubiyi Member

  5. Mr. Olayinka Oni Member

     Board Audit and Risk Management Committee

     The Committee is responsible for evaluating and handling issues relating to Internal and External Audit and Risk Management in the Company.

     Terms of reference

• Oversee the assessment of the qualification, independence and performance of the Internal Audit function;

• Review significant findings and recommendations by Internal Audit and Management responses thereof;

• Review implementation of Internal Audit recommendations by Management;

• Ensure that the operations of the Internal Audit function is in compliance with acceptable International Standards for the Professional Practice of Internal Auditing;

• Ensure there are effective controls in place to minimize operational risks and optimize value;

• Oversee the process for identifying risks across the Company and ensure that Management puts in place adequate mechanisms to prevent, detect and report risks;

• Ensure that adequate whistle-blowing procedures are in place;

• Review the proposed audit plan(s) and review the results of internal audits completed since the previous Committee meeting as well as the focus of upcoming internal audit projects;

• Review the results of the annual audit report and discuss the annual financial statements with external auditors and Management;

• Review the auditors' management control letter presented by the external auditors and ensure adequacy of Management's response;

• Review with the Chief Financial Officer annually the significant financial reporting issues and practices of the Company, and ensure that

  appropriate accounting principles are applied including financial controls relating to the "closing of the books" process;

• Meet separately, and at least quarterly, with the Chief Financial Officer, the Chief Internal Auditor and relevant Senior Management staff to discuss the adequacy and effectiveness of accounting and financial controls of the Company;

• Ensure that there are standards, policies and processes in place to identify and measure all material risks and respond appropriately;

• Re-evaluate all risk management policies on a periodic basis to accommodate major changes in internal or external factors; and ensure that changes are in the line with the Company's risk profile and appetite;

• Review executive management reports, detailing the adequacy and overall effectiveness of the Company's risk and capital management documents-including policies, procedures and processes for the identification, measurement, monitoring and control of risk management;

• Make recommendations to the Board concerning the levels of risk capacity and tolerance, and ensure that they are managed within these parameters; and

• Provide to the Board such assurances as it may reasonably require regarding compliance by the Company. The members are as follows:

  1. Ms. Aisha Bashir Chairperson

  2. Mr. Adeshola Adekoya Member

  3. Ms. Eniye Ambakederemo Member

  4. Mr Ashutosh Kumar Member

     Board Governance, Nomination & Remuneration Committee

     The Committee acts on behalf of the Board on all matters relating to corporate governance, remuneration and the appointment and re-election of Directors.

     Terms of reference

• Review the size and composition of the Board taking into consideration the appropriate skill mix, personal qualities, expertise, ability to exercise

  independent judgment and diversity required to discharge the Board's duties;

• Make recommendations on the experience and training required for Board Committee membership, operating structure, and other operational matters;

• Establish the criteria and execute the process, upon Board approval, for appointing and re-appointing new and existing Directors respectively, and the removal of non-performing Directors;

• Ensure that every member of the Board receives a formal letter of appointment, setting out their roles, responsibilities, time commitments for Board

  and Board Committees' meetings;

• Develop and maintain an appropriate corporate governance framework for the Company, and make recommendation to the Board on transparent and sound corporate governance principles;

• Develop job specification and Key Performance Indicators (KPIs), which shall be approved by the Board for the role of the Chairman and the Non-Executive Directors;

• Ensure the Board carries out annual performance review of itself and that of its Committees in accordance with applicable laws, regulations, policies and codes. The result of the exercise shall be reviewed by this Committee who shall also ensure the recommendations following the evaluation report are implemented;

  Board Governance, Nomination and Remuneration Committee - Continued

• Ensure that there is a proper induction programme and ongoing learning for the Board and Board committee members;

• Provide adequate oversight in reviewing and updating the Board learning programmes to ensure continuous improvement of the Board

  members' performance;

• Ensure that a proper succession policy and plan exists for Board members and members of its subsidiaries;

• Develop, review and recommend the remuneration policy to the Board for approval;

• Review and recommend to the full Board, compensation for the Chief Executive officer and senior management staff. The committee shall

  ensure its recommendations are in accordance with the Company's remuneration policy, the provisions of the CBN and SEC Codes of corporate

  governance and all applicable laws;

• Ensure that salary scales are set within the general Company's business policy;

• Make recommendations to the Board, reinforcing sound corporate governance principles, on the incentive structure of the Company including executive compensation and bonuses;

• Provide input to the annual report of the Company on Directors' compensation, aligning with the provisions of the CBN and SEC Codes;

• Perform other duties related to the Company's compensation structure in accordance with applicable laws, rules, policies and regulation; and

• Conduct periodic peer review of compensation and remuneration levels to ensure the Company remains competitive; and

• Undertake other reviews as the Committee deems necessary in order to fulfil its responsibilities as may be requested by the Board.

  The members are as follows:

  1. Ms. Eniye Ambakederemo Chairperson

  2. Mr. Abubakar Suleiman Member

  3. Ms. Aisha Bashir Member

     Statutory Audit Committee

     The Committee meets every quarter, but could also meet at any other time, as the need arise.

     Terms of reference

• To make recommendations to the Board to be put to the Shareholders for approval at the AGM regarding the appointment, removal and remuneration of the external auditors of the Company;

• To authorise the internal auditor to carry out investigations into any activities of the Company which may be of interest or concern to the Committee;

• To review and approve the annual audit plan and ensure that it is consistent with the scope of audit engagement, having regard to the seniority, expertise and experience of the audit team;

• To review representation letter(s) requested by the external auditors before they are signed by Management;

• To review the Management Letter and Management's Response to the auditor's findings and recommendations;

• To assist in the oversight of the integrity of the Company's financial statements, compliance with legal and other regulatory requirements,

  assessment of qualifications and independence of the external auditor, and performance of the Company's internal audit function as well as

  that of external auditors;

• To establish an internal audit function and ensure there are other means of obtaining sufficient assurance of regular review or appraisal of the system of internal controls in the Company;

• To ensure the development of a comprehensive internal control framework for the Company, obtain assurance and report annually in the

  financial report, on the operating effectiveness of the Company's internal control framework;

• To review such other matters in connection with overseeing the financial reporting process and the maintenance of internal controls as the Committee shall deem appropriate;

• To oversee management's process for the identification of significant fraud risks across the Company and ensure that adequate prevention,

  detection and reporting mechanisms are in place;

• At least on an annual basis, obtain and review a report by the internal auditor describing the strength and quality of internal controls including any issues or recommendations for improvement, raised by the most recent internal control review of the Company;

• Discuss the annual audited financial statements and half yearly unaudited statements with Management and external auditors;

• Discuss policies and strategies with respect to risk assessment and management;

• Meet separately and periodically with Management, internal auditors and external auditors;

• To review and ensure that adequate whistle-blowing procedures are in place;

• To review, with the external auditors, any audit scope limitations or problems encountered and management's responses to same;

• To review the independence of the external auditors and ensure that where non-audit services are provided by the external auditors, there is no conflict of interest;

  Statutory Audit Committee - Continued

• To consider any related party transactions that may arise within the Company;

• Invoke its authority to investigate any matter within its terms of reference for which purpose the Company must make available the resources to the internal auditors with which to carry out this function, including access to external advice where necessary;

• Prepare the Committee's report for inclusion in the Company's Annual Report; and

• Report to the Board regularly at such times as the Committee shall determine necessary. The members are as follows:

  1. Alhaji Mustapha Jinadu, F.CIoD Chairman

  2. Mr. Adeshola Adekoya Member

  3. Mr. Idongesit E. Udoh Member

  4. Ms. Christie O. Vincent Member

  5. Ms. Eniye Ambakederemo Member

Management Committee

1 Executive Committee (ExCo)

The Committee provides leadership to the Company and ensures the implementation of strategies and long-term goals approved by the Board.

Whistle Blowing Process

Whistle blowing process is a mechanism by which suspected breaches of the Company's internal policies, processes, procedures and unethical

activities by any stakeholder (staff, customers, suppliers and applicants) are reported for necessary actions.

It ensures a high degree of integrity and transparency in order to achieve efficiency and effectiveness in the Group's operations.

The reputation of the Company is of utmost importance and every staff of the Company has a responsibility to protect the Company from any persons or act that might jeopardize its reputation. Staff are encouraged to speak up when faced with information that would help protect the Company's reputation.

An essential attribute of the process is the guarantee of confidentiality and protection of the whistle blower's identity and rights. It should be noted that the ultimate aim of this policy is to ensure efficient service to the customer, good corporate image and business continuity in an atmosphere compliant with best industry practice.

The Company has a Whistle Blowing channel via the Company's website, dedicated telephone hotlines, and e-mail address in compliance with

provisions of the CBN Guidelines for Whistleblowing for Banks and Other Financial Institutions in Nigeria.

The Company's compliance function is responsible for monitoring and reporting on whistle blowing.

Compliance Statement on Securities Trading by Interested Parties

The Company has put in place a Policy on Trading on the Company's Securities by Directors and other key personnel of the Company.

During the period under review, the Directors and other key personnel of the Company complied with the terms of the Policy and the provisions of Section 14 of the Amendment to the Listing Rules of The Nigerian Stock Exchange.

Complaint Management Policy

The Company has put in place a Complaint Management Policy guiding the resolution of disputes with stakeholders on issues relating to the Investment and Securities Act.

STATEMENT OF CORPORATE RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

1. In accordance with section 405 of the Companies and Allied Matters Act of Nigeria 2020, the Chief Executive Officer and the Chief Financial Officer certify that the financial statements have been reviewed and based on our knowledge, the

   1. condensed unaudited financial statements do not contain any untrue statement of material fact or omit to state a material fact, which would make the statements misleading, in the light of the circumstances under which such statement was made, and

   2. condensed unaudited financial statements and all other financial information included in the statements fairly present, in all material respects, the financial condition and results of operation of the company as of and for, the periods covered by the unaudited financial statements;

2. We state that management and directors:

   1. are responsible for establishing and maintaining internal controls and has designed such internal controls to ensure that material information relating to the Group is made known to the officer by other officers of the group and company, particularly during the period in which the condensed unaudited financial statement report is being prepared.

   2. has evaluated the effectiveness of the group's internal controls within 90 days prior to the date of its condensed unaudited financial statements, and

   3. certifies that the group's internal controls are effective as of that date;

3. We have disclosed:

   1. all significant deficiencies in the design or operation of internal controls which could adversely affect the group and company's ability to record, process, summarize and report financial data, and has identified for the group any material weaknesses in internal controls, and

   2. whether or not, there is any fraud that involves management or other employees who have a significant role in the group and company's internal control; and

   3. as indicated in the report, whether or not, there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

The condensed unaudited financial statements of the Group and the Company for the quarter ended 31 March 2025 were approved by the directors on May 28, 2025.

Yemi Odubiyi

Signed by:

Adebimpe Olambiwonnu, FCA

Chief Finance Officer Group Chief Executive Officer

FRC/2013/PRO/ICAN/001/00000001253 FRC/2013/PRO/DIR/003/00000001279

# aPublic 8

Sterling Financial Holdings Company Plc and Subsidiaries Condensed Unaudited Interim Financial Statements for the Period Ended 31 March 2025

Condensed Statement of Profit or Loss

For the period ended 31 March 2025

Group Company

In millions of Naira

Interest income Interest expense

Net interest income 47,421 27,234 273 212

Net Fees and commission income 5 10,125 7,147 - -

Net trading income 6 2,899 6,940 - -

Other operating income 7 3,858 1,623 1,021 164

Operating income 64,303 42,944 1,294 376

Credit loss expense on financial assets 8 (2,446) (1,831) - -

Net operating income after impairment 61,857 41,113 1,294 376

Personnel expenses 9 (10,643) (6,582) (301) (168)

Other operating expenses 10 (12,398) (9,406) (51) (4)

General and administative expenses 11 (14,382) (11,122) (481) (107)

Other property, plant and equipment cost 12 (4,340) (4,653) (65) (28)

Depreciation and amortisation 13 (1,830) (1,243) (19) (20)

Total expenses (43,593) (33,006) (917) (327)

Profit before income tax 18,264 8,107 377 49

Income tax expense 14(a) (1,033) (603) (63) (1)

Profit for the period 17,231 7,504 314 48

Earnings per share - basic (in kobo) 15 38k 26k 1k 0k

Earnings per share - diluted (in kobo) 15 38k 26k 1k 0k

Statement of Other comprehensive income

In millions of Naira March 2025 March 2024 March 2025 March 2024

Items that will not be reclassified to profit or loss in

subsequent periods: -

Fair value loss on equity instruments at fair value through other

comprehensive income (98) 2,151 - -

Total items that will not be reclassified to profit or loss (98) 2,151 - -

Items that will be reclassified to profit or loss in subsequent periods:

• Debt instruments measured at fair value through other comprehensive income: :

• Net change in fair value during the period (853) (24,938) - -

Net gains/(losses) on financial investments at fair value

through

other comprehensive income: (853) (24,938) - -

Other comprehensive loss for the period, net of tax (951) (22,787) - -Total comprehensive (loss)/income for the period, net of tax 16,280 (15,283) 314 48

# PUBLIC 9

Sterling Financial Holdings Company Plc and Subsidiaries Condensed Unaudited Interim Financial Statements for the Period Ended 31 March 2025

Condensed Statement of Financial Position

As at 31 March 2025

Group Company

The consolidated and separate financial statements were approved by the Board of Directors on May 28, 2025 and signed on its behalf by:

Yemi Odubiyi

Adebimpe Olambiwonnu, FCA

Chief Finance Officer Group Chief Executive Officer

FRC/2013/PRO/ICAN/001/00000001253 FRC/2013/PRO/DIR/003/00000001279

# PUBLIC 10

Condensed Statement of changes in equity

For the period ended 31 March 2025 Group

For the period ended 31 March 2025

Group Company

I

# PUBLIC 13

Notes to the Consolidated and Separate Financial Statements

For the period ended 31 March 2025

1. Corporate information

   Sterling Financial Holdings Company Plc ("the Company") is a company incorporated in Nigeria with registered office at 20 Marina Lagos. These separate and consolidated financial statements, for the period ended 31 March 2025, are prepared for the Company and the Group (Holding Company and its subsidiaries, separately referred to as "Group entities") respectively.

   The Group operating entities are engaged in commercial banking with emphasis on retail and consumer banking, trade services, corporate, investment and non-interest banking activities. It also provides wholesale banking services including the granting of loans and advances, letter of credit transactions, money market operations, electronic and mobile banking products and other banking activities.

2. Accounting policies

   1. (a) Basis of preparation and statement of compliance

      The condensed consolidated and separate financial statements of the Company and its subsidiary have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and in the manner required by the Companies and Allied Matters Act 2020, The Financial Reporting Council of Nigeria (Amendment) Act 2023, the Companys and Other Financial Institutions Act 2020, and relevant Central Bank of Nigeria circulars.

      The condensed consolidated and separate financial statements have been prepared on a historical cost basis, except for financial assets measured at fair value.

      1. Functional and Presentation currency

         The consolidated and separate financial statements are presented in Nigerian Naira and all values are rounded to the nearest million (N'million) except when otherwise indicated.

      2. Basis of Consolidation

         The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 March 2025. Sterling Financial Holdings Company Plc consolidates a subsidiary when it controls the entity. Control is achieved when the Company is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

         Generally, there is a presumption that a majority of voting rights results in control. However, under individual circumstances, the Company may still exercise control with less than 50% shareholding or may not be able to exercise control even with ownership over 50% of an entity's shares. When assessing whether it has power over an investee and therefore controls the variability of its returns, the Company considers all relevant facts and circumstances, including:

         • The purpose and design of the investee

         • The relevant activities and how decisions about those activities are made and whether the Company can direct those activities

         • Contractual arrangements such as call rights, put rights and liquidation rights

         • Whether the Company is exposed, or has rights, to variable returns from its involvement with the investee, and has the power to affect the variability of such returns

           Profit or loss and each component of OCI are attributed to equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

           When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting policies. All intra-group assets, liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

           A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

           If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.

      3. Seasonality of operations

         The impact of seasonality or cyclicality on operation is not regarded as significant to the condensed interim financial statement. The operation of the Group were even within the financial year.

      4. Issuance, repurchase and repayment of debts and equity securities

         During the period under review, the Group did not issue any commercial paper that resulted in an external inflow into the Bank.

      5. Significant events after the end of the reporting period

         There were no events after the reporting date which could have a material effect on the financial position of the Group and the Company as at 31 March 2025 and profit or loss and other comprehensive income attributable to equity holders on that date which have not been adequately adjusted for or disclosed.

      6. Dividends

         The Directors did not recommend the payment of any dividend for the Company's interim results for the period ended 31 March 2025.

      7. Changes to accounting policy

      The accounting policies adopted are consistent with those of the previous financial period.

   2. Summary of material accounting policies

The accounting policies applied by the Company in these condensed interim financial statements are the same as those applied by the Group in its consolidated financial statements as at 31 December 2024 (unless otherwise stated). Below are the significant accounting policies.

1. Right-of-use assets

   The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term.

   The right-of-use assets are presented in Note 24 and are subject to impairment in line with the Group's policy as described in Impairment of non-financial assets.

2. Lease liabilities

   Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising thereof is accounted for on a straight-line basis over the lease term and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

3. Short-term leases and leases of low-value assets

   The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value (mainly offsite ATM space) assets recognition exemption to leases (i.e., below N2million). Lease payments on short term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

4. Financial instruments

   • Recognition and initial measurement

     Regular purchases and sales of financial assets and liabilities are recognised on the trade date. A financial asset or financial liability is

     measured initially at fair value plus or minus, for an item not at fair value through profit or loss, direct and incremental transaction costs that are directly attributable to its acquisition or issue. Transaction costs of financial assets and financial liabilities carried at fair value through profit or loss are expensed in profit or loss at initial recognition. Financial assets that are transferred to third parties but do not qualify for derecognition are presented in the statement of financial position as "pledged asset" if the transferee has the right to sell or re-pledge them.

   • Classification of financial instruments

   The Group classified its financial assets under IFRS 9, into the following measurement categories:

   • Those to be measured at fair value through other comprehensive income (FVOCI) (either with or without recycling)

   • Those to be measured at fair value through profit or loss (FVTPL)); and

   • Those to be measured at amortised cost.

     The classification depends on the Group's business model for managing financial assets and the contractual cashflow characteristics of the financial asset (i.e solely payments of principal and interest- SPPI test). Directors determine the classification of the financial instruments at initial recognition.

     The Group classifies its financial liabilities as liabilities at fair value through profit or loss and liabilities at amortised cost.

     - Subsequent measurements Debt instruments

     The subsequent measurement of financial assets depend on its initial classification:

     Amortised cost: A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

   • The financial asset is held within a business model whose objective is to hold financial assets to collect contractual cash flows; and

   • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

     The gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is determined using the effective interest method and reported in profit or loss as 'Interest income'.

     The amortised cost of a financial asset or liability is the amount at which the financial asset or liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initial amount recognised and the maturity amount, minus any reduction for impairment.

     Fair value through other comprehensive income (FVOCI): Investment in debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated as FVTPL:

   • the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

   • the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

   The debt instrument is subsequently measured at fair value. Gains and losses arising from changes in fair value are included in other comprehensive income (OCI) and accumulated in a separate component of equity. Impairment gains or losses, interest revenue and foreign exchange gains and losses are recognised in profit and loss. Upon disposal or derecognition, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other operating income. Interest income from these financial assets is determined using the effective interest method and recognised in profit or loss as 'Interest income'.

   The measurement of credit impairment is based on the three-stage expected credit loss model as applied to financial assets at amortised cost.

   Fair value through profit or loss (FVTPL): Financial assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. The gain or loss arising from changes in fair value of a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is included directly in the profit or loss and reported as 'Net trading income in the period in which it arises. Interest income from these financial assets is recognised in profit or loss as 'Interest income'.

   Equity instruments

   The Group subsequently measures all equity investments at fair value. For equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis. Where the Group's management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such investments continue to be recognised in profit or loss as other operating income when the Group's right to receive payments is established unless the dividend clearly represents a recovery of part of the cost of the investment. All equity financial assets are classified as measured at FVOCI. Where the Group has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss.

   - Business model assessment

   The Group makes an assessment of the objective of a business model in which an asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

   1. The stated policies and objectives for the portfolio and the operation of those policies in practice. In particular, whether management's strategy focuses on earning contractual interest revenue, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of the liabilities that are funding those assets or realising cash flows through the sale of the assets;

   2. How the performance of the portfolio is evaluated and reported to the Group's management;

   3. The risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

   4. How managers of the business are compensated e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

   5. The frequency, volume and timing of sales in prior periods, the reasons for such sales and its expectations about future sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of how the Group's stated objective for managing the financial assets is achieved and how cash flows are realised.

      Financial assets that are held for trading or managed and whose performance is evaluated on a fair value basis are measured at FVTPL because they are neither held to collect contractual cash flows nor held both to collect contractual cash flows and to sell financial assets.

      Assessment of whether contractual cash flows are solely payments of principal and interest on principal

      For the purposes of this assessment, 'principal' is defined as the fair value of the financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin.

      In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making the assessment, the Group considers:

      • contingent events that would change the amount and timing of cash flows;

      • leverage features;

      • prepayment and extension terms;

      • terms that limit the Group's claim to cash flows from specified assets (e.g. non-recourse asset arrangements); and

      • Features that modify consideration of the time value of money - e.g. periodical reset of interest rates.

        The Group holds a portfolio of long-term fixed rate loans for which the Group has the option to revise the interest rate at future dates. These reset rights are limited to the market rate at the time of revision. The right to reset the rates of the loans based on the revision in market rates are part of the contractually agreed terms at inception of the loan agreement, therefore the borrowers are obligated to comply with the reset rates without any option of repayment of the loans at par at any reset date. The Group has determined that the contractual cash flows of these loans are solely payments of principal and interest because the option varies with the interest rate in a way that is considered a consideration for the time value of money, credit risk, other basic lending risks and costs associated with the principal amount outstanding. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

        - Reclassifications

        Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets that are debt instruments. A change in the objective of the Group's business occurs only when the Group either begins or ceases to perform an activity that is significant to its operations (e.g., via acquisition or disposal of a business line).

        The following are not considered to be changes in the business model:

      • A change in intention related to particular financial assets (even in circumstances of significant changes in market conditions)

      • A temporary disappearance of a particular market for financial assets

      • A transfer of financial assets among parts of the entity with different business models

   When reclassification occurs, the Group reclassifies all affected financial assets in accordance with the new business model. Reclassification is applied prospectively from the 'reclassification date'. Reclassification date is 'the first day of the first reporting period following the change in business model. Gains, losses or interest previously recognised are not restated when reclassification occurs.

   The Group may only sell insignificant portion of debt instruments measured at amortised cost frequently without triggering a change in business model. If the Group sells significant portions, this will not be more than twice a year subject to cases of unlikely to reoccur events such as:

   • Run on the Company/stressed liquidity scenarios

   • Credit risk event i.e. perceived issuer default

   • In the event of merger and takeover, the Company may sell portion of the portfolio if the security holdings violates set limits

   • Other one-off events

   Significance is defined to mean 5% of the portfolio value and subject to the policy on frequency above.

   The Group may sell debt instruments measured at amortised cost without triggering a change in business model if the sale is due to deterioration in the credit quality of the financial assets or close to maturity. A financial asset is said to be close to maturity if the outstanding tenor of the financial asset from the time of issue is 25% or less of the original tenor.

   Sales close to maturity are acceptable if the proceeds from the sales approximate the collection of the remaining contractual cash flows. At the point of sale an assessment will be conducted to determine that the cash flows expected from the financial asset does not exceed the cash flows from the sales by ten (10) per cent.

   - Modifications of financial assets and financial liabilities Financial assets

   If the terms of a financial asset are modified, the Group evaluates whether the cash flows of the modified asset are substantially different. If the cash flows are substantially different, then the contractual rights to cash flows from the original financial asset are deemed to have expired. In this case, the original financial asset is derecognised and a new financial asset is recognised at fair value. Any difference between the amortised cost and the present value of the estimated future cash flows of the modified asset or consideration received on derecognition is recorded in the profit or loss statement.

   If the cash flows of the modified asset carried at amortised cost are not substantially different, then the modification does not result in derecognition of the financial asset. In this case, the Group recalculates the gross carrying amount of the financial asset and recognises the amount arising from adjusting the gross carrying amount as a modification gain or loss in profit or loss.

   Financial liabilities

   The Group derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different. This occurs when the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment (i.e the modified liability is not substantially different), any costs or fees incurred are adjusted to the carrying amount of the liability and are amortised over the remaining term of the modified liability.

   - Impairment of financial assets

   In line with IFRS 9, the Group assesses its financial instruments for impairment using Expected Credit Loss (ECL) approach.

   The Group applies a three-stage approach to measuring expected credit losses (ECL) on debt instruments accounted for at amortised cost, FVOCI, loan commitment and financial guarantee contracts. Assets migrate through the following three stages based on the change in credit quality since initial recognition:

   1. Stage 1: 12-months ECL

      For exposures where there has not been a significant increase in credit risk since initial recognition and that are not credit-impaired upon origination, the portion of the lifetime ECL associated with the probability of default events occurring within the next 12 months is recognised. Interest revenue is calculated by applying the effective interest rate to the gross carrying amount.

   2. Stage 2: Lifetime ECL - not credit-impaired

      For credit exposures where there has been a significant increase in credit risk since initial recognition but are not credit-impaired, a lifetime ECL is recognised. Interest revenue is calculated by applying the effective interest rate to the gross carrying amount.

   3. Stage 3: Lifetime ECL - credit-impaired

   Financial assets are assessed as credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that asset have occurred. As this uses the same criteria as under IAS 39, the Group's methodology for specific provisions remains unchanged. For financial assets that have become credit-impaired, a lifetime ECL is recognised and interest revenue is calculated by applying the effective interest rate to the amortised cost rather than the gross carrying amount.

   At each reporting date, the Group assesses whether there has been a significant increase in credit risk for financial assets since initial recognition by comparing the risk of default occurring over the expected life between the reporting date and the date of initial recognition.

   In determining whether credit risk has increased significantly since initial recognition, the Group uses its internal credit risk grading system, external risk ratings and forecast information to assess deterioration in credit quality of a financial asset.

   The Group assesses whether the credit risk on a financial asset has increased significantly on an individual or collective basis. For the purposes of a collective evaluation of impairment, financial assets are grouped on the basis of shared credit risk characteristics, taking into account instrument type, credit risk ratings, date of initial recognition, remaining term to maturity, industry, geographical location of the borrower and other relevant factors.

   The amount of ECL is measured as the probability-weighted present value of all cash shortfalls over the expected life of the financial asset discounted at its original effective interest rate. The cash shortfall is the difference between all contractual cash flows that are due to the Group and all the cash flows that the Group expects to receive. The amount of the loss is recognised using an allowance for credit losses account

   The Group considers its historical loss experience and adjusts this for current observable data. In addition, the Group uses reasonable and supportable forecasts of future economic conditions including experienced judgment to estimate the amount of an expected impairment loss. IFRS 9 introduces the use of macroeconomic factors which include, but is not limited to, unemployment, interest rates, gross domestic product, inflation and commercial property prices, and requires an evaluation of both the current and forecast direction of the economic cycle. Incorporating forward looking information increases the level of judgement as to how changes in these macroeconomic factors will affect ECL. The methodology and assumptions including any forecasts of future economic conditions are reviewed regularly.

   If, in a subsequent period, credit quality improves and reverses any previously assessed significant increase in credit risk since origination, depending on the stage of the life time 2 or stage 3 of the ECL bucket, the Group would continue to monitor such financial assets for a probationary period of 90 days to confirm if the risk of default has decreased sufficiently before upgrading such exposure from life time ECL (Stage 2) to 12- months ECL (Stage 1). In addition to 90 days probationary period above, the Group also observes a further probationary period of 90 days to upgrade from Stage 3 to 2. This means a probationary period of 180 days will be observed before upgrading financial assets from lifetime ECL (Stage 3) to 12 months ECL (Stage 1).

   In the case of the new asset category for debt instruments measured at FVOCI, the measurement of ECL is based on the three-stage approach as applied to financial assets at amortised cost. The Group recognises the impairment charge in profit or loss, with the corresponding amount recognised in other comprehensive income, with no reduction in the carrying amount in the statement of financial position.

   - Impairment of non-financial assets

   In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

5. Investment properties

Investment properties are measured initially at cost, including transaction costs. Subsequently, investment properties are carried at historical cost less accumulated depreciation and impairment. The fair value and valuation inputs of the investment property are also disclosed in note 25 in accordance with IAS 40.

The investment properties consist of buildings which are depreciated on a straight-line basis over their useful life of 50 years.

Investment properties are derecognized either when they have been disposed off (i.e. at the date the recipient obtains control) or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

Transfers are made to (or from) investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the carrying amount at the date of change in use. If owner-occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use.